LANSING – Letters sent yesterday to Governor Jennifer Granholm and Senate Majority Leader Ken Sikkema by a coalition representing thousands of Michigan hospitality workers and retail businesses blast the Governor’s proposal to raise the state liquor tax because of the impact on the state’s struggling hospitality industry. The letter, signed by the Michigan Restaurant Association, the Michigan Licensed Beverage Association, the Associated Food Dealers of Michigan and the Distilled Spirits Council, stated, “While you have labeled this increase a ‘sin tax,’ the fact is a tax on alcohol is a tax on Michigan’s hospitality industry. “Under this ill-conceived plan, 1,700 Michigan hospitality employees will lose their jobs and will struggle to find new positions in this economy… What do you say to the hard-working waitresses, bartenders, retail employees and small business owners who will be put out on the street as a result of your tax hike?” they wrote. The text of the letter follows: June 14, 2004 Dear Governor Granholm, On behalf of the thousands of hard-working men and women in Michigan’s hospitality industry, we are writing to express our strong opposition to the proposal to increase the tax on distilled spirits products. While you have labeled this increase a “sin tax,” the fact is a tax on alcohol is a tax on Michigan’s hospitality industry. Alcohol is a major profit component of the state’s entire hospitality industry – from liquor stores, bars and restaurants to hotels and tourism. Alcohol sales in Michigan restaurants alone represent 25 percent of total restaurant sales. As you know, Michigan’s liquor tax is already the highest in the region and is almost three times as much as Indiana’s tax rate. Further hiking the tax will only drive down sales and send more consumers across state lines to purchase their products. Under this ill-conceived plan, 1,700 Michigan hospitality employees will lose their jobs and will struggle to find new positions in this economy, further straining state resources. Economic analysis of your proposal raising the mark-up on spirits from 65 percent to 74 percent, shows the state stands to lose $10 million in tax revenue currently generated by the hospitality industry. What do you say to the hard-working waitresses, waiters, bartenders, retail employees and small business owners who will be put out on the street as a result of your tax hike? Your plan is particularly troubling, given the staggering number of job losses our state has suffered over the past year. We urge you to protect our jobs and to protect the state’s struggling hospitality industry. Please do not turn your back on our small businesses and the thousands of hard-working individuals we employ. Sincerely, Catherine A. Pavick, Executive Director Michigan Licensed Beverage Association Robert A. Gifford, Executive Director Michigan Restaurant Association Michael G. Sarafa, President Associated Food Dealers of Michigan Dave Holliday, Vice President Distilled Spirits Council of the U.S. cc: Senate Majority Leader Kenneth Sikkema
CONTACT: Frank Coleman or Lisa Hawkins
Telephone: 202-682-8840
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